Real Estate Goes Into the Mobile Stratosphere

However, the popular names are getting frightfully expensive

The past couple days has been a bonanza for housing market-related operators such as Trulia (NYSE:TRLA), Zillow (NASDAQ:Z) and even Angie’s List (NASDAQ:ANGI), all of whom have soared after reporting blowout earnings.

While they all follow the broader theme of the continued resurgence of the real estate market, the real story here is the growing importance of mobile in real estate.

Smartphones, tablets and the like allow people to find and research homes on the go, and Trulia and Zillow’s GPS features help identify those users as being on the road. Needless to say, that type of active user is a “hot lead” (as they’re likely looking to make a purchase), and real estate agents likely will pay a premium to make such a contact.

Zillow’s conference call provided some interesting details on the mobile front. Traffic reached 46 million unique users, with more than half coming from mobile sources.

To pull this off, Zillow has 23 distinct mobile apps for consumers and pros — it has such scope because users tend to want apps that focus on core functions, as opposed to full-on suites. That said, you can expect more such apps to hit the market in 2013.

Zillow has benefited by applying mobile to other categories, such as rentals and even mortgages — the latter of which gets about a quarter of its searches from mobile searches.

The company even has used its mobile magic for the home improvement market. Zillow’s new app, which is called Digs Estimates, allows users to get cost estimates for remodeling projects. It appears to be ideal for the Apple (NASDAQ:AAPL) iPad form factor, which allows for rich graphics and interactive tools.

You can expect to see more of this kind of innovation both at Zillow and Trulia. Plus, mobile apps have clear-cut revenue models, so that can propel growth for years to come.

Still, the outsized push in Zillow and Trulia looks like the result of panic buying, and the valuations (both around 11 times revenues) are awfully frothy. Investors that think Zillow and Trulia look like attractive companies aren’t wrong — they are — they’re just not attractively valued. Be patient.

Based in Silicon Valley, Tom Taulli is in the heart of IPO land. On a regular basis, he talks with many of the top tech CEOs and founders trying to find the next hot deals and finding out which start-ups are stinkers.

A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.

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